Japan's Nikkei ends at 2-week low as new fiscal year begins

Japan’s Nikkei share average ended at a two-week low on Monday (Apr 1), dropping below the key 40,000 mark, as investors sold stocks to book profits on the first day of the country’s financial year.

The Nikkei fell 1.4 per cent to 39,803.09, its lowest close since March 18, after opening 0.7 per cent higher. The broader Topix was down 1.71 per cent at 2,721.22.

“Institutional investors typically sell stocks to book profits on the first day of the financial year,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

The Nikkei is up 19 per cent in 2024 and scaled the 40,000 mark to hit record highs in March, after a steady 54 per cent rise since early 2023.

Chip-related Tokyo Electron and Advantest lost 3.21 per cent and 4.96 per cent, respectively, while Toyota Motor slipped 4.03 per cent.

A closely watched Bank of Japan (BOJ) survey showed optimism in Japan’s services sector climbed to a 33-year high in the first quarter on booming tourism and rising profits from price hikes.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The survey also showed big firms plan to raise their capital spending by 4.0 per cent in the financial year to March 2025, following an 11.5 per cent increase expected for the last fiscal year.

Strategists said the BOJ survey did not become a major cue for the market as the outcome was within their expectations.

The currency market was steady, offering little cues to local equities, said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.

The yen touched a 34-year low against the dollar of 151.975 on Wednesday and was last at 151.35 per dollar.

Heavy machinery makers fell, with Kawasaki Heavy Industries and Mitsubishi Heavy Industries falling 6.36 per cent and 4.5 per cent, respectively.

Brokerage Nomura Holdings fell 5.41 per cent.

Bucking the trend, watchmaker Citizen Watch rose 5.05 per cent and calculator maker Casio Computer gained 4.94 per cent to become the top performers on the Nikkei. REUTERS